Angela Merkel and François Hollande began two-day visit to Kiev and Moscow in
attempt to agree new ceasefire amid escalation in fighting in eastern
Ukraine

Europe's leaders were in last-ditch talks to broker a peace deal in Ukraine on Thursday night, as threats by America to send arms to Kiev raised fears of a direct confrontation between Russia and the West.

Angela Merkel, the German chancellor, and François Hollande, the French president, began a two-day visit to Kiev and Moscow in an attempt to get both governments to sign a new ceasefire deal.

The talks, which come amid an escalation in the fighting in eastern Ukraine, were an attempt by European capitals to head off moves by Washington to begin arming Ukrainian forces, who have so far been outgunned by the Kremlin-backed rebels.

Reports that the White House might give direct military assistance to Kiev first emerged last weekend, when US officials hinted that the Pentagon was alarmed at the rapid gains made by the separatists in recent weeks.

On Thursday, the White House confirmed that it was considering a change of policy, with John Kerry, the US secretary of state, saying that President Barack Obama would decide "soon" on whether to provide weapons.

"The president will make his decision, I'm confident, soon," Mr Kerry said during a visit to Kiev, stressing that Mr Obama wanted to give the Franco-German initiative a chance first. "We are not interested in a proxy war, our objective is to change Russia's behaviour."

However, the prospect of America pursuing a more aggressive policy has caused alarm in Europe, where countries that are heavily dependent on Russia for energy are anxious not to antagonise President Vladimir Putin any further.

While any weapons would be mainly defensive in nature – designed primarily to halt the rebel advance – it would be seen as a direct challenge by the Russian leader.

On Thursday, Philip Breedlove, a US air force general and Nato's top commander, conceded that it "could trigger a more strident reaction from Russia".

The last time America supplied weapons to be used against Russian forces was to Afghan mujahideen guerrillas fighting Soviet troops in the 1980s.

Mr Kerry spoke as Britain confirmed that it would make 1,000 troops available to a new Nato rapid reaction force to protect its eastern members.

The creation of the "Very High Readiness Joint Task Force" was agreed when Nato leaders met in Wales last year. It will be on standby to deploy up to 5,000 troops within two to five days.

That force, though, is strictly for the defence of Nato members only. As such, it will underline a sense in Kiev that the West – while supporting it politically – is doing nothing to help militarily in the conflict, in which an estimated 5,000 people have now died.

Recent weeks have seen the fighting intensify anew, with a major push by the rebels to capture Debaltseve, a Ukrainian-held transport hub, and push the front line back from Donetsk, their stronghold.

Having appeared on the brink of defeat last summer, the separatists have captured nearly 200 square miles of territory in the past four months. Nato analysts suspect their long term strategy is to gain enough land to create an economically viable independent state, something Kiev says it will never accept.

A diplomatic source told The Telegraph that the Ukrainians hoped Washington would give them anti-tank weapons and hi-tech radar equipment, allowing them to locate the rebels' Kremlin-supplied artillery batteries.

Merkel, Poroshenko and Hollande in Kiev (AFP)

The source said that because such weapons were essentially "defensive" rather than "offensive", the US might have less compunction about supplying them. "It is not about lethal or non-lethal, but defensive or offensive," he said.

He added that Kiev believed that most of the separatists could be brought into negotiations, but would not feel compelled as long as the balance of the conflict was in their favour. Kiev estimates that the separatists now have between 200 and 500 Russian-supplied tanks.

European leaders, though, are opposed to any further raising in the military stakes. Martin Lidegaard, the Danish foreign minister, said on Thursday that there was no point in "throwing more weapons on the bonfire".

That position is shared by Ms Merkel and Mr Hollande, who warned of a "total war" that could spill into Europe unless a peace deal was hammered out.

"We always think that war is far away," said Mr Hollande. "And yet, a few hours flying time way, in eastern Europe, there are women and men – civilians – who are dying each day."

Diplomats said Mrs Merkel's peace initiative – ahead of a major security conference in Munich this weekend – reflected a growing impatience with Mr Putin and the 28-member European Union, which she feels has been diplomatically sluggish.

The German chancellor believes that any deal reached with Russia at the Moscow talks must be based on the Minsk agreement reached with Mr Putin and Russian-backed separatists last September.

There is particular suspicion over Russia's call for peacekeepers to keep the warring sides apart in eastern Ukraine. European diplomats fear it would lead to a "frozen conflict" that would effectively concede that Kiev had lost control of Donetsk and Luhansk.

In Moscow on Thursday, Dmitry Peskov, Mr Putin's spokesman, said the "three heads of state will discuss what exactly the three countries can do in order to facilitate a swift end to the civil war in south-east Ukraine".

That language reflected the Kremlin's long-standing argument that it is not a party to the conflict.

If Friday's talks with Moscow do not bear fruit, European Union foreign ministers are likely to ratchet up sanctions on the Kremlin at a meeting on Monday.

The sanctions have already tipped Russia's economy into freefall, combined with the fall in world oil prices that has robbed the Kremlin of its main source of income.

So far, though, diplomats have not seen any significant dent in Mr Putin's domestic popularity, or his appetite for the conflict in Ukraine.